In the first month of this Spring season, we saw the highest number of new listings come onto the market since 2021. This has given buyers more choice and as expected led to softening auction clearance rates.
As usual, new listing volumes will hit a seasonal peak in November, before tapering off in the weeks leading up to Christmas and the summer holidays.
If you’re out there looking to buy this Spring, here are my best tips for bidding at auction – or trying to buy beforehand – as well as how best to negotiate a private sale.
My best tips for buying at auction
Prepare yourself by attending some auctions to observe auctioneers’ techniques and buyers’ bidding strategies
Don’t be afraid to start the auction. Make a low first bid then sit tight, size up your competition and watch how the auction unfolds
Unless it’s going to pass in, don’t bid again until the reserve price has been met
When it’s close to the end, resume bidding. Project confidence with fast and assertive bids
Call out the full price, not the increment, to give your competitors a reality check
If it’s going to pass in, be the highest bidder. The agent will likely offer you the first opportunity to negotiate after the event
Stick to your walk-away price. Short-lived disappointment is better than long-term remorse
My best tips for buying before the auction or via private treaty
Ask the agent if the vendors are willing to consider pre-auction offers
Make your first offer close to your walk-away price and put it in writing
Waive your right to a cooling-off period to prove you’re serious
Don’t say anything negative about the home. Vendors are influenced by their emotions, too!
As negotiations progress, ask the agent if you can sweeten your offer with any special terms that might suit the vendors’ circumstances, such as a shorter or longer settlement. Such trade-offs are a flexible way to add value to the deal without raising your price
Choose an odd number for your final offer. For example, offer $973,500 instead of $975,000. This implies that you’re basing your offer on some objective criteria. It also implies that you’re at your financial limit and have no more to spend
Attaching a cheque to a signed contract makes your offer a lot more seductive to the vendor
Finally, keep in mind that fate can play a hand in finding the right new home or investment.
In my 40 years of real estate, I’ve seen many underbidders walk away miserable only to find a more suitable property just a few weeks later.
If you miss a property – or even several properties, accept that it wasn’t meant to be and look forward to finding something better soon.
Good luck!
By John McGrath, Chief Executive Officer of McGrath Estate Agents.
